Gazing into a crystal ball

The Conference Board of Canada outlines the eight issues it thinks will be key to HR in the next two years

The Conference Board of Canada has pulled out its crystal ball in an attempt to identify the hot HR issues for the next two years.

What did it see when it gazed into the future? That the 21st century will belong to human resources and to organizational capabilities.

According to the Conference Board, the reason for this is a simple:

“For the first time in the history of management, it is the human mind that is the primary creator of value,” it said in a report. “The quality of people and their engagement will be critical factors in corporate viability and survival.”

Here are the eight strategic issues that will dominate in the next two years, according to the Conference Board’s Hot HR Issues for the Next Two Years:

Building your leadership pipeline is a must. Succession planning became a stark reality in the United States when the plane carrying U.S. Commerce Secretary Ron Brown and 12 chief executive officers crashed into a mountainside in Bosnia.

In a heartbeat 12 organizations lost the luxury of planning ahead. Many, without a concrete succession plan, moved into a state of emergency. When it comes to succession planning many organizations still argue that they will cross that bridge when they come to it. But identifying and grooming successors is critical. The most successful global organizations, such as General Electric, 3M and Monsanto, engage in systematic succession planning to ensure a seamless transition.

These organizations believe in having a slate of high-potential leaders. Although few Canadian executives are currently focused on succession planning, it will be top of mind for HR leaders.

Leadership must be dispersed throughout the organization. The complexity and uncertainty inherent in today’s business environment demands a high degree of agility and adaptiveness in organizations. This can come only with a redefinition of leadership.

Organizations must focus on leadership as a role rather than a function and individuals must be called upon to exercise leadership within their spheres of influence. Unipolar leadership, usually associated with command and control in hierarchical organizations, must give way to leadership exercised at all levels of the organization. All high-performing organizations foster a culture that encourages individuals to exercise leadership. Over the next few years HR leaders will focus on creating an organizational culture that demands leadership of all employees.

Employment branding gets you the talent you seek. No market is more competitive than the market for employees. The war for talent is fierce and is likely to become more so with the massive numbers of employees retiring in the next five years.

Top organizations are moving beyond the vanilla “employer of choice” concept to a more rigorous strategy of attracting and retaining the right employees through branding. 3M’s focus on innovation, for instance, creates an employment brand that attracts innovators from the available talent pool. The company retains innovators with HR policies and practices that deliver on the promise.

True employment branding ensures high motivation and helps align employees’ vision and values with those of the company. In a tight labour market a weak employment brand identity can stonewall even the most creative hiring and retention strategies. HR leaders will therefore work more aggressively towards differentiating their firms in the labour market.

Organizations must capture a bigger portion of the employee mindshare. Hiring top talent is one thing; keeping talent and getting its full engagement is another. Talent is mobile and 58 per cent of employees in Canada are open to move to other organizations.

Organizations also fail to capture a bigger portion of the employee mindshare. Employees operate, at best, at about 60 per cent efficiency despite a plethora of programs designed to enhance engagement. Strategies to gain employee commitment are often flawed and ineffective. Pay raises may be a great short-term motivator but motivational theory research shows money satisfies only to a certain extent. After that people look for meaning in their lives. To achieve congruency between employees’ needs and those of employers, HR executives will focus on instilling a high sense of organizational purpose in the minds of employees.

Organizational capacity must exceed the rate of change in the business environment. Change in the knowledge economy is non-linear and discontinuous. Its complexity and velocity cause tremendous unpredictability. The organization that will thrive in this environment is one in which the rate of learning exceeds the rate of change. Competitive edge has shifted from the product and the technology to more than just people.

Competition today is between the processes different organizations use to ensure employees are trained and up-to-date. In high-performing organizations such as GE and Pepsico, where CEOs personally drive the learning agenda, learning cascades down throughout. HR executives will focus on creating learning organizations.

Get ready for a heterogeneous workforce, and make diversity a living value. Recent immigration patterns have sharply internationalized the labour force. About four million people in Canada—13.4 per cent of the population—are visible minorities. By the end of 2016, it is expected that visible minorities will constitute about 20 per cent of Canada’s population.

This, combined with the fact baby boomers will soon retire at a predictable high rate, means the workforce will comprise a higher proportion of visible minorities. In this context valuing diversity takes on a new urgency. Diversity must move beyond being a purely intellectual exercise to becoming an inherent component of organizational values.
Some companies have already begun investing heavily in formally ingraining diversity into their culture. Organizations that don’t follow suit will not be able to fully maximize the talents of their entire staff. HR leaders will focus on fostering a culture welcoming of visible minorities.

Line managers must communicate effectively with employees. Research shows the major weakness in organizations is communication. Line managers, who tend to focus on bottom-line results, often need reminding of the importance of ongoing communication with staff. Employees’ levels of motivation are dependent on how well line managers communicate with staff. It’s not about sending numerous e-mails — it is about effective face-to-face communication. When the going gets tough, effective communication is important. It can make all the difference between a motivated staff with a positive attitude and an unmotivated, disgruntled group of individuals.

Measurement leads to credibility, but are HR measures meaningful? With increasing investment in human resources management, it is only natural that boards and CEOs demand HR to show returns on investment.

The HR function will be called upon to create meaningful measures of HR performance. Traditional HR measures focus on activities (such as the time it takes to hire people and the number of individuals who have taken training programs) but senior management will no longer accept such measures from a function that is so critically important for organizational excellence. HR executives will be asked to show how they are building organizational capabilities.

As Dave Ulrich, a management guru from the University of Michigan’s School of Administration said, “rather than measuring the number of people hired, we should focus on the quality of people hired. How well do they help the organization innovate, change and deliver other capabilities?”

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